The governor of the Northern Mariana Islands, a small Pacific US territory just north of Guam, has killed the legislation that would have allowed one of the territory’s local governments to launch a fully backed US dollar-pegged stablecoin.
In an April 11 letter seen by Cointelegraph, Northern Mariana Islands Governor Arnold Palacios said he vetoed the bill as it “presents several legal issues and may be unconstitutional.”
Palacios’ letter said the bill, which largely dealt with issuing licenses to internet casinos, would regulate an activity that could not “be clearly restricted” to Tinian, a small island forming part of the territory that was hoping to launch a stablecoin.
Tinian, which has just over 2,000 residents and a largely tourism-based economy, is governed by the local government, the Municipality of Tinian and Aguiguan, one of four municipalities in the Commonwealth of the Northern Mariana Islands.
In February, Republican Northern Marianas Senator Jude Hofschneider led the introduction of the bill to amend a local Tinian law to allow internet-only casino licenses, which tacked on a provision allowing the Tinian treasurer to issue, manage and redeem a “Tinian Stable Token.”
The four-member Tinian delegation to the Marianas legislature passed the bill in a unanimous vote on March 12.
In vetoing the bill, Palacios didn’t comment on the proposed stablecoin, instead taking issue with its aim to police an industry that can cross jurisdictional boundaries, and said the measure lacked “robust enforcement measures to prevent illegal gaming activities.”
A highlighted excerpt of Governer Palacios’ letter noting his reasons for vetoing the stablecoin and internet gambling bill Source: Northern Mariana Islands Governor’s Office
Tinian misses chance at beating Wyoming
The bill’s passage could have seen Tinian’s government be the first US government entity to issue a stablecoin ahead of Wyoming, whose Governor Mark Gordon said in March that the state’s stablecoin could be ready for a launch in July.
The stablecoin was to be known as the Marianas US Dollar (MUSD), which was to be fully backed by cash and US Treasury bills held in reserve by the Tinian Municipal Treasury, according to statements shared with Cointelegraph last month.
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The Tinian local government chose tech services firm Marianas Rai Corporation, based in the Commonwealth’s capital of Saipan, to exclusively provide the infrastructure to issue and redeem MUSD and develop its ecosystem.
The token was slated to launch on the eCash blockchain, a network that rebranded from Bitcoin Cash ABC in 2021 and is a fork of Bitcoin Cash — a blockchain that split off from Bitcoin in 2017.
The launch of MUSD was meant to coincide with Google’s $1 billion plan announced in April to route fiber-optic subsea cables from the mainland US through Tinian and onto Japan to improve internet connectivity.
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